Deck 12: Implementing Strategy Through Organization

Question 1

In a typical control system, after performance is compared to established goals and standards, next actions are different depending on whether the performance meets the goals and standards or there is variance between performance and established goals and standards.

Answer 1

True

Question 2

The human capital of an organization includes the norms and value systems, people within an organization as well as the employees.
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Answer 2

False

Question 3

The nature of work being performed has an effect on whether the span of control is narrow or wide which can influence the height of the management hierarchy.

Answer 3

True

Question 4

In a firm with a multidivisional structure, the object is to try to achieve tight coordination between functions with emphasis on R&D, production, and marketing.

Question 5

Control through culture is ineffective because employees do not internalize values.

Question 6

Control systems can help managers evaluate how efficiently a company is producing goods and providing services.

Question 7

​An important purpose of control systems is to motivate employees to work toward increasing efficiency, quality, innovation, and responsiveness to customers.

Question 8

Organization architecture is the totality of a firm's organizational arrangements, including its formal organizational structure, controls systems, incentive systems, organizational culture, organizational processes, and human capital.

Question 9

Organizational structure has three dimensions and the horizontal differentiation element refers to the location of decision-making responsibilities within a structure and also to the number of layers in a hierarchy.

Question 10

In a multidivisional structure, corporate managers can compare the performance of one division to another in terms of its cost structure or the profit it generates.

Question 11

Different divisions in a firm with a multidivisional structure are not given authority to adopt their own organizational structures.

Question 12

Deciding how to allocate resources within a firm, strategies for developing new products, and how performance of managers will be evaluated are all part of the organizational culture of a company.

Question 13

Problems such as identifying profitability, lack of accountability, and poor control, led businesses away from a multidivisional structure to a functional business structure.

Question 14

The organizational hierarchy is flatter in a multidivisional structure than in a product or functional structure.

Question 15

No matter how high a hierarchy grows, one problem associated with efficiency is that information passed from one level to the next can be accidently or deliberately distorted.

Question 16

Company Alpha wants to give top management time to focus on critical issues through increased delegation and the reduction the amount of information top managers have to process. The company also wants to give employees a greater degree of individual freedom and control over their work. The best vertical differentiation option for Company Alpha is centralization.

Question 17

When differentiation through innovation is high and environmental change is high, the best strategy is a matrix structure with very high integration.

Question 18

One of the reasons that IBM almost failed and went bankrupt in the 1990's was due to its outdated corporate culture of consensus-based decision making which while effective in the 1970's, did not allow it to be competitive in the rapid decision making and entrepreneurial risk taking culture of the 1990s,

Question 19

Bradley is a new employee in the sales department at a local car dealership. In his first few months on the job, he will be learning the norms and values of the organization. This refers to organizational culture.

Question 20

In the multidivisional structure, each division typically contains only a partial set of value-chain activities.

Question 21

Company Zeta is a company that hires employees based on their ability to fit into the ten core values of the company. There is a team dedicated to setting up fun events, lunches and programs. Employee team building is stimulated through the group cleaning of communal spaces and random group lunches with employees from different teams within the company. These strategies are an example of addressing which of the following?

A) Organizational architecture
B) Organizational structure
C) Organizational processes
D) Organizational culture
E) Organizational controls

Question 22

Company Beta is looking for a strategy to boost its performance due to an increasingly tougher competitive environment. Bureaucratic inefficiencies associated with a tall hierarchy have been identified. Company Beta has decided to lay off people and reduce the number of layers in the hierarchy from nine to five. This move has grown Beta's profits and revenues. This strategy is called delayering.

Question 23

PeopleFinder, a start-up social media network, is a decentralized organization. This means that the organization promotes flexibility and reduces bureaucratic costs; lower-level managers are authorized to make on-the-spot decisions.

Question 24

Which of the following is NOT an element of organizational architecture?

A) Location
B) Culture
C) Processes
D) Structure
E) People

Question 25

Which form of control would you MOST likely find in a voluntary or charity organization?

A) Bureaucratic control through rules and procedures
B) Control through norms and values
C) Financial control through accurate financial statements
D) Output control, since it is the cheapest
E) Incentive systems to motivate employees

Question 26

The purpose of which of the following is to provide managers with incentives for motivating employees as well as feedback on how the company performs?

A) Control system
B) Adaptive culture
C) Organizational design
D) Span of control
E) Hierarchy of authority

Question 27

Matrix structure and teams are favored by firms in stable and low technology environments due to the high need for coordination and complex integration mechanisms.

Question 28

​One of the main differences between a product team and a team in a matrix structure is that a matrix team is more permanent than a team in a product structure.

Question 29

​To build capabilities in organizational design that would allow a company to develop a competitive advantage, strategic managers must start at the functional level.

Question 30

​The need for integrating mechanisms is greater when a company's structure is more complex.

Question 31

Organizational culture is the:

A) norms and value systems that are shared among the employees of an organization.
B) means through which a company assigns employees to specific tasks and roles and specifies how these tasks and roles are to be linked together to increase efficiency, quality, innovation, and responsiveness to customers.
C) process of deciding how a company should create, use, and combine organizational structure, control systems, and culture to pursue a business model successfully.
D) clear and unambiguous chain of command that defines each manager's relative authority from the CEO down through top, to middle, to first-line managers.
E) principle that a company should design its hierarchy with the fewest levels of authority necessary to use organizational resources effectively.

Question 32

Control through organizational culture is so powerful because it:

A) eliminates the need for managers in large companies.
B) enables employees to follow organizational values, after they've internalized them, without thinking about them.
C) results in maximum decentralization and the elimination of bureaucracy.
D) achieves increased performance through the alignment of organizational goals with external societal expectations.
E) achieves external control through motivated coworkers.

Question 33

Tom's leads a team at Empire Holdings. The team's responsibilities are to develop courses of action that decide how to allocate resources within a firm, how new products are developed, and how the performance of managers will be evaluated and given feedback. Tom's team is responsible for which of the following?

A) Organizational architecture
B) Organizational structure
C) Organizational processes
D) Organizational culture
E) Organizational controls

Question 34

Flat organizational structures are less flexible and tend to resist change.

Question 35

Walmart is an example of a business that uses a centralized vertical differentiation strategy because all purchasing decisions are made at its headquarters in Arkansas which allows them to take advantage of their bargaining power, driving down costs and passing on those savings to consumers in the form of lower prices, which enables the company to grow its market share and profits.

Question 36

Silica Dustcloud Inc. plans to change its organization structure from a market structure to a functional structure and create separate divisions. This change will better serve its different groups of customers.

Question 37

In a business with a matrix structure and a high degree of integration, this dynamic environment calls for bureaucratic controls to be used for financial budgets and output controls to be applied to the different functions and to cross-functional product development teams.

Question 38

Decentralization and centralization decisions are absolute for the entire business, it doesn't make sense to centralize some decisions and decentralize others, depending on the type of decision and the firm's strategy because it causes confusion among business units.

Question 39

When companies become too tall and the chain of command too long, strategic managers tend to lose control over the hierarchy and, subsequently, their strategies.

Question 40

Which of the following is responsible for the establishment and maintaining of organizational culture?

A) The culture of an enterprise can be shaped by landmark events in its history
B) Formal and informal socialization mechanisms
C) Founders or important leaders can have a profound impact on organizational culture
D) Informal rules of behavior that employees are expected to adopt if they want to fit in and succeed within the organization
E) All of these are responsible for the establishment and maintaining of organizational culture.

Question 41

Organizations strive to control employees' behavior by linking which of the following systems to their control systems?

A) Disciplinary
B) Disincentive
C) Reporting
D) Administrative
E) Incentive

Question 42

At LittleHippo, an online retail company, the work environment is playful. Employees often get their pictures taken wearing silly wigs and masks. This atmosphere is part of the company's:

A) ​organizational density.
B) ​organizational structure.
C) ​organizational culture.
D) ​strategic control systems.
E) ​competitive environment.

Question 43

The growth of distributed computer and telecommunications information systems such as E-mail, video-conferencing, intranets, and web-based search engines have made which of the following informal integrating mechanism possible?

A) Functional structure
B) Multidivisional structure
C) Matrix structure
D) Knowledge networks
E) Decentralized

Question 44

Company Delta is a single line business a production function, an R&D function, a marketing Function and a sales function. Steve Coats, the CEO, oversees each of these functions. Which of the following organizational structure does this represent?

A) Functional structure
B) Multidivisional structure
C) Matrix structure
D) Knowledge networks
E) Decentralized

Question 45

A matrix structure would be the most appropriate for which of the following type of firm?

A) A company in which each employee is required to have only one boss
B) A company operating in the maturity stage of the industry life cycle
C) A company that is dependent on rapid mobilization of resources for competitive success
D) A company with a high level of vertical differentiation
E) A company in which the speed of product development is not crucial

Question 46

Which of the following would be favored by firms in a rapidly changing and high-technology environment that need a high degree or coordination and more complex integration mechanisms?

A) Liaison roles
B) Direct contact
C) Centralization
D) Teams
E) Knowledge networks

Question 47

Which of the following decisions would most likely be decentralized in a firm's strategy?

A) Local adaptation
B) Realization of economies of scale
C) Major financial expenditures
D) Manufacturing decisions
E) Legal issues

Question 48

Which of the following is NOT a strategy required for a company with a need for high integration?

A) Business-level strategy involves differentiation through the introduction of new and/or improved product offerings.
B) Different functions will be assigned different output targets, depending on their specific tasks.
C) Temporary teams are formed to oversee the coordination, development and introduction of a new product.
D) Foster informal knowledge networks.
E) There is an ongoing need to coordinate the R&D, production, and marketing functions of the firm to ensure that new products are developed in a timely manner.

Question 49

In a typical control system, which of the following actions is taken after variances are discovered between performance and established goals and standards?

A) Establishment of goals and standards
B) Measurement of performance
C) Administration of corrective action and delivery of feedback
D) Provision of reinforcement and delivery of feedback
E) Performance meets and exceeds goals and standards

Question 50

If a firm's leaders are using a functional structure but feel it is becoming too complex as the company experiences growth, the leaders can turn to:

A) a simple structure.
B) downsizing.
C) reengineering.
D) restructuring.
E) a multidivisional structure.

Question 51

​Companies that are innovative and able to deal with environmental change with new strategies and structures probably have:

A) ​weak cultures.
B) ​strong functional cultures.
C) ​adaptive cultures.
D) ​prescriptive cultures.
E) ​cost-conscious culture.

Question 52

Natalie and Shay are both employees at RightTool, Inc. The marketing manager often meets with Shay, the production manager, to solve specific mutual problems. This is an example of:

A) organizational culture.
B) liaison roles.
C) direct contact.
D) diverging mechanisms.
E) strategic control.

Question 53

How decisions are made and work is performed within the organization is referred to as:

A) uniformity of output.
B) conformity.
C) organizational processes.
D) maximization of effort.
E) behavioral control.

Question 54

A typical matrix organizational structure:

A) groups employees in two ways simultaneously to maximize the rate at which different kinds of products can be developed.
B) breaks up a company's growing product line into smaller, more manageable subunits.
C) groups people according to their common expertise and experience or because they use the same resources.
D) is a way of grouping employees into separate customer groups so that each group can focus on satisfying the needs of a particular customer group.
E) is a way of grouping employees to best satisfy the needs of customers within different regions.

Question 55

All employees participate in a project team within a which of the following structures? They are known as two-boss employees.

A) Functional
B) Geographic
C) Market
D) Matrix
E) Product

Question 56

Which of the following actions is involved in delayering?

A) Eliminating business units
B) Rethinking business processes
C) Creating more business units
D) Flattening the organizational hierarchy
E) Broadening the span of control

Question 57

Susan works at a high-technology firm. As a manager, she is a member of the manufacturing function and a product development team. Susan's firm is likely to be operating under which of the following structural forms?

A) functional structure
B) multidivisional structure
C) matrix structure
D) integration structure
E) organizational structure

Question 58

In any organization, for-profit or not-for-profit, span of control refers to the:

A) number of managers at the highest levels in the organization.
B) CEO and his or her management team.
C) number of direct reports that a manager has.
D) number of supervisors in a specific segment of a manufacturing activity.
E) number of members elected or appointed to be on the board of directors.

Question 59

At FastFries, a fast-food restaurant, rules are published in all employee areas, explaining expectations regarding arrival time, lunch breaks, when to take shorter breaks, and when to socialize. This is an example of:

A) output control.
B) personal control.
C) bureaucratic control.
D) conversion activities.
E) strategic competencies.

Question 60

To reduce costs, companies pursuing a cost leadership strategy prefer to use which of the following to closely monitor and evaluate functional performance?

A) Output controls
B) Personal controls
C) Behavioral controls
D) Cultural controls
E) Input controls

Question 61

Explain the benefits of the multidivisional structure for managing a firm that competes in several industries.

Question 62

Describe the roles that organizational structure, strategic control systems, and organizational culture play in strategy implementation.

Question 63

List and describe three ways of achieving control within an organization.

Question 64

Identify and discuss the three building blocks of organizational structure.

Question 65

What would be the result if a company were to successfully align its organizational structure with its business-level strategy?

A) Performance will decline.
B) Performance will improve.
C) Flexibility will improve.
D) Stability will decline.
E) Bureaucratic controls will improve.

Question 66

Discuss the differences in the strategies and organization for a firm with a need for high integration versus a firm with a low integration.

Question 67

What is the role of output controls in a firm with a minimal need for integration?

A) Controls in the form of budgets are used to allocate financial resources to each function and control spending by the functions.
B) The CEO using personal supervision to influence the behavior of functional heads.
C) May reduce the need for personal controls and bureaucratic rules.
D) Allow the firm to operate with a flatter organization structure and wider spans of control.
E) Used to assess how well a function is performing.

Question 68

Which of the following is NOT true about organizational processes?

A) They are only found at the top hierarchy levels within an organization.
B) A firm's core competencies or valuable, knowledge-based resources are embedded in its processes.
C) Effective processes can lower the costs of value creation and add additional value to a product.
D) Processes cut across functions, or divisions, and require cooperation between individuals in different subunits.
E) Valuable new processes that might lead to a competitive advantage can be developed anywhere within the organization's network of operations.

Question 69

Which of the following is an example where a low integration control system would work best?

A) A high-tech firm that needs to change to meet customer demands
B) A chemical company looking to diversify its existing product line with products that are similar
C) A construction company looking to diversify its existing service line with services that are unrelated
D) An apparel company pursuing a differentiation strategy
E) A manufacturing company looking to expand into other markets

Question 70

Essentially, centralization or decentralization are concepts that refer to the:

A) levels where decisions are made in the hierarchy of an organization.
B) number of hierarchical levels existing in an organization.
C) tools that allow an organization to monitor and evaluate whether its strategies and structure are working as intended.
D) business models designed to help a company expand nationally and manage a wide range of products.
E) strategies implemented by an organization to create, market, and distribute its products.

Question 71

When decision-making responsibilities are decentralized, benefits include all of the following EXCEPT:

A) increased motivation and accountability.
B) lower bureaucratic costs from flattened hierarchy.
C) reduced information overload.
D) easier coordination of functions.
E) flexibility in decision making.

Question 72

What is the difference between organizational structure, processes and culture? How does human capital fit into organizational architecture? Do these run independently of each other or rely on each other to create a firm's organizational architecture?
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Question 73

A firm's vertical differentiation determines where in its hierarchy decision-making power is concentrated. Compare the arguments for decentralization and centralization. Must a business choose one or the other?